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Creative Class Theory and Economic Performance in UK Cities

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Creative Class Theory and Economic Performance in UK Cities Munich Personal RePEc Archive The Wrong Stuff? Creative Class Theory and Economic Performance in UK Cities Nathan, Max London School of Economics, Centre for Cities 1 October 2007 Online at https://mpra.ub.uni-muenchen.de/29486/ MPRA Paper No. 29486, posted 14 Mar 2011 09:12 UTC © 2007 Max Nathan / CJRS Published in Canadian Journal of Regional Science (2007), September issue THE WRONG STUFF? CREATIVE CLASS THEORY AND ECONOMIC PERFORMANCE IN UK CITIES MAX NATHAN RESEARCH ASSOCIATE, CENTRE FOR CITIES Enterprise House 56-65 Upper Ground London SE1 9PQ United Kingdom www.centreforcities.org www.squareglasses.co.uk Macintosh HD:Users:max:Documents:squareglasses:CJRS:07-09-06 CJRS creative 1 classes paper (mn).doc © 2007 Max Nathan / CJRS Abstract Richard Florida’s ‘creative class’ theory suggests that diverse, tolerant, ‘cool’ cities will outperform others. Ethnic minorities, gay people and counter-culturalists attract high-skilled professionals: the presence of this ‘creative class’ ensures cities get the best jobs and most dynamic companies. This paper examines Florida’s ideas, focusing on the evidence in British cities. Drawing on previously published work, it first tests the Florida model on a set of British cities, finding weak support for the creative class hypothesis. It then examines this hypothesis in detail. It finds little evidence of a creative class, and little evidence that ‘creative’ cities do better. The paper concludes that the creative class model is a poor predictor of UK city performance. There is other, stronger evidence that diversity and creativity are linked to urban economic growth. [130 words] 1. INTRODUCTION A few years ago, New York Times columnist David Brooks wrote an instructive guide on ‘How to Be an Intellectual Giant’. Amongst the advice on tone, subject niche, demeanour, how to title one’s first book and cadge the next newspaper column, Brooks includes one crucial insight: be wrong. But be wrong in the right way – ideas should be eye-catching and controversial enough to get everyone paying attention. That way lies fame – or at least infamy. Many would accuse US academic Richard Florida of being wrong in the right way. For cities and the urban policy world, the biggest idea for years is Florida’s ‘creative class’ theory, as set out in his bestseller The Rise of the Creative Class (Florida 2003) and more recent sequel, The Flight of the Creative Class (Florida 2005). Florida has a striking take on city performance: diverse, tolerant, ‘cool’ cities do better. Places with more ethnic minorities, gay people and counter-culturalists will draw high-skilled professionals, and thus attract the best jobs and most dynamic companies. Macintosh HD:Users:max:Documents:squareglasses:CJRS:07-09-06 CJRS creative 2 classes paper (mn).doc © 2007 Max Nathan / CJRS These ideas are novel, controversial – and for progressive commentators, politicians and policy-makers, highly attractive. On both sides of the Atlantic, Richard Florida’s work has been met with much interest and some scepticism. Not surprisingly, Florida’s ideas have taken him from academic obscurity to worldwide recognition, and the author has developed a new niche as public intellectual, consultant and urban policy guru.1 It is important to understand the creative class approach, and what it implies for cities around the world. First, because if it is correct, many countries’ approaches to urban policy will need a rethink. And second, because – without much-needed examination or scrutiny – it is becoming part of the conventional wisdom about how to make cities work better. Some cities and states are already putting Florida’s ideas into practice – Michigan, Cleveland and Philadelphia have all launched ‘cool cities’ initiatives, for example. The Mayor of Detroit has announced the city is ‘hip hop’; Berlin’s Mayor says the city is ‘poor but sexy’ (Storper and Manville 2006). In the UK, Liverpool is now considering creating a ‘Gay Quarter’ to rival Manchester’s Gay Village, and Dundee has zoned a new ‘Cultural Quarter’ next to the city centre (Kelly 2005, McCarthy 2006). In the US, creative class ideas have generated headlines like ‘Cities Need Gays To Thrive’ and ‘Be Creative or Die’ (Malanga 2004). They have also been slated, attacked and written off by a mob of angry academics, wonks and other pundits (e.g. Peck 2005, Kotkin 2005; Markusen 2005; Hannigan 2004, Malanga 2004). So has Florida hit on something profound about how cities work, or is he just wrong in the right way? And what are the lessons for post-industrial cities across the West? 1 See the ‘Richard Florida Creativity Group’ at www.creativeclass.org and www.catalytix.biz. Macintosh HD:Users:max:Documents:squareglasses:CJRS:07-09-06 CJRS creative 3 classes paper (mn).doc © 2007 Max Nathan / CJRS 2. ABOUT THIS PAPER Much of Florida’s research concentrates on American cities. This paper aims to test the Florida thesis on British cities. It examines the creative class theory in more detail, and its implications for cities and urban policy in the UK. It then explores some broader themes in diversity, creativity, and city economic performance, and extract some generic lessons for post-industrial Western cities. The paper is structured as follows. Section 3 provides context, locating creative class theory among broader debates on the drivers of urban economic performance – and the real recovery of UK cities over the past decade and a half. Section 4 looks more closely at Florida’s approach, and how it has evolved. Section 5 discusses one recent attempt to reproduce Florida’s findings for urban areas in England and Wales. Section 6 takes a critical look at the assumptions underlying Florida’s model. Section 7 discusses some of the broader debates around diversity, creativity and urban economic performance. Section 8 concludes. 3) WHERE IS FLORIDA? PLACING THE CREATIVE CLASS APPROACH The resurgence of cities is a big theme right now, for researchers seeking to explain it – and for national and city governments seeking to exploit it. In the UK, cities have risen up the policy agenda, and the British Government recognises that the major conurbations, or ‘city-regions’, are the building blocks of the UK economy (ODPM / DTI / HMT 2006). This policy shift reflects real progress on the ground. Until the early 1990s, big British cities were in decline, losing population and employment share and suffering a range Macintosh HD:Users:max:Documents:squareglasses:CJRS:07-09-06 CJRS creative 4 classes paper (mn).doc © 2007 Max Nathan / CJRS of negative social consequences. They were seen by Government as problems to be dealt with, rather than assets to be developed. As Mrs Thatcher so memorably put it: ‘We must do something about those inner cities’.2 Over the past decade or so, big British cities have got better. On key outcomes like population, output and employment, London has grown significantly; large conurbations like Manchester and Leeds are in recovery mode; and many small, service-based cities in the regions around the capital – such as Reading, Slough and Milton Keynes – have expanded hugely. Over the longer term, this last group of cities has been gradually gaining in economic significance (ODPM 2006, Moore and Begg 2004). Not all UK cities have shared the gains, however: many Northern ex-industrial cities – like Oldham, Burnley, Doncaster and Hull – continue to look for new economic roles. Urban recovery is partly due to factors outside cities’ control – in particular, strong macroeconomic growth since 1993, and high public spending since 2000. But it also reflects performance factors at city and city-region level. How do current theories help us understand the recent recovery in cities? Urban resilience and adaptability – especially in non-‘global cities’ – can be explained in two main ways (Storper and Manville 2006). The preferences of firms The first set of theories focus on the behaviour and preferences of firms, and the production economies that cities provide businesses (Marshall 1920, Hoover 1948, 2 Delivered on the morning of her 1987 Election victory, on the steps of the Conservative Party’s HQ. Macintosh HD:Users:max:Documents:squareglasses:CJRS:07-09-06 CJRS creative 5 classes paper (mn).doc © 2007 Max Nathan / CJRS Jacobs 1969). Despite falling transport costs and pervasive new forms of ICT, urban areas remain locations of choice for many businesses. Agglomeration economies in cities remain strong (Fujita, Krugman and Venables 2001). Thick labour markets, hub infrastructure and access to markets all matter, particularly for firms in the service sector – where face to face communication with suppliers, colleagues or customers is also important. Technology appears to have double-edged effects, probably increasing the need for face to face communication to build trust and process complex and/or tacit information (Charlot and Duranton 2006, Sassen 2006, Storper and Venables 2004). More broadly, cities may benefit from dynamic agglomeration economies – if knowledge spillovers and the flow of ideas stimulates innovation across sectors, and leads to the creation of new goods and services over the long term (Jacobs 1969, Storper and Manville 2006). These ideas are considerably more controversial and harder to measure (see e.g. Polese 2005). Why does ‘dynamic agglomeration’ happen in some cities and not others? Cluster theory, and related concepts of innovation systems provide some partial answers. Over time, localisation economies allow close, ‘compete-collaborate’ relationships to develop between networks of firms (Porter 1995, Simmie 2004). The public sector and HE Institutions play a critical role in mediating and shaping these networks. There is a good deal of evidence for agglomeration-based theories of city performance, particularly the role of simple urbanisation economies in bigger cities (see e.g. Graham 2005, Rice and Venables 2004, Rosenthal and Strange 2003). Nevertheless, none fully explains UK cities’ very variable performance, or why some Macintosh HD:Users:max:Documents:squareglasses:CJRS:07-09-06 CJRS creative 6 classes paper (mn).doc © 2007 Max Nathan / CJRS relatively small cities have grown rapidly at the expense of others.
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